Barauni Refinery was built in collaboration with Russia and Romania. Situated 125 kilometeres from Patna, it was built with an initial cost of Rs 49.40 crore. Barauni Refinery was commissioned in 1964 with a refining capacity of 1 Million Metric Tonnes per Annum (MMTPA).

After de-bottlenecking, revamping and expansion project, it's capacity is 6 MMTPA. Matching secondary processing facilities such as Resid Fluidised Catalytic Cracker (RFCC), Diesel Hydrotreating (DHDT), Sulphur Recovery Unit (SRU) have been added.

Barauni Refinery was initially designed to process low sulphur crude oil (sweet crude) of Assam. After establishment of other refineries in the Northeast, Assam crude is unavailable for Barauni. Hence, sweet crude is being sourced from African, South East Asian and Middle East countries like Nigeria, Iraq & Malaysia.

The refinery receives crude oil by pipeline from Paradip on the east coast via Haldia. With various revamps and expansion projects at Barauni Refinery, capability for processing high-sulphur crude has been added. High-sulphur crude oil (sour crude) is cheaper than low-sulphur crudes, thereby increasing not only the capacity but also the profitability of the refinery.